Revealed: The big winners of the controversial £310m European Social Fund tender

Serco has come out as the biggest winner of the government’s controversial European Social Fund tender, securing 17 contracts worth £60.5 million, FE Week analysis has shown.

They were followed by The Growth Company Limited, which claimed 8 contracts valued at £56.4 million even though it is essentially owned by the the Greater Manchester Combined Authority and Greater Manchester Local Enterprise Partnership.

Overall, 47 providers won 125 contracts with a total value of just under £310 million to deliver ESF from April 2019 to July 2021, according to figures released by the Education and Skills Funding Agency today.

The 5 biggest provider winners in the tender

 

The agency said the contracts were awarded through a “stringent procurement process, which adhered to EU rules of open, fair and competitive tendering, and was conducted in accordance with the Public Contract Regulations 2015”.

But the procurement wasn’t conducted out without controversy.

The agency delayed issuing contracts several times, after multiple providers claimed that the government broke tender rules, namely by excluding the “track record” section when marking bids, while the ESFA has admitted to “errors”, such as naming Serco Regional Services Limited as a winner instead of Serco Limited.

Serco Limited made losses of £29.5 million in 2017, according to its accounts, and is rated ‘requires improvement’ by Ofsted – although this is just for its apprenticeships provision.

Providers were also aggrieved to find out that Learndirect’s new owner had secured contracts worth more than £20 million, in conjunction with his other company Dimensions Training Solutions.

Further questions were asked about the tender in March, after FE Week discovered an “unprecedented” amount of tie-breaks in the procurement.

One aggrieved provider even threatened legal action against the ESFA, but decided to drop this because of the likely cost and a fear of repercussions from the agency.

The European Social Fund is funding that the UK received, as a member state of the EU, to increase job opportunities and to help people to improve their skill levels, particularly those individuals who find it difficult to get work.

The 47 providers who have secured European Social Fund funding will help to deliver the training in 38 local enterprise partnership areas.

The biggest single contract won in this tender went to Serco, which was awarded £10 million for the “delivery of education and training that best supports the needs of local employers and employees” in the Black Country.

The Growth Company Limited won the second biggest contract, worth £9.9 million, to deliver equivalent training in Greater Manchester.